Reuters: US Dollar Report: UPDATE 2-Petrobras says causes of first loss in 13 yrs to ease

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UPDATE 2-Petrobras says causes of first loss in 13 yrs to ease Aug 6th 2012, 18:02 Tweet Share this Email Print Mon Aug 6, 2012 2:02pm EDT * Company declared 41 wells dry, non-commercial in Q2 * Petrobras says output to return to 2011 levels in Q4 * Company has much to do to improve results, CEO says * Stock trims losses after executives' remarks By Jeb Blount and Leila Coimbra RIO DE JANEIRO, Aug 6 (Reuters) - Brazil's state-run oil giant Petrobras said on Monday that factors that caused the company's first quarterly loss in 13 years are likely to ease in the coming months, helping its stocks to trim most of their losses. The sharp depreciation of Brazil's real against the dollar during that period, which led to higher debt and import costs, is not expected to happen again in coming quarters, company executives said in a web cast with analysts. Increases in gasoline and diesel prices should cut losses in Petrobras' refining unit while new production systems should allow oil output to recover or slightly exceed 2011 levels by the end of the year, the executives promised. A more than four-fold increase in exploration and production costs, sparked by the closing and write-off of 41 dry frontier region wells, will not be repeated. "We won't repeat such a large number of dry wells in the second half," Chief Executive Maria das Graças Foster told reporters at company headquarters in Rio de Janeiro. "We have a lot to do in the company to improve our results." Petrobras posted on Friday a 1.35 billion reais ($665 million) net loss for the second quarter, compared with a profit of 10.9 billion reais a year earlier. All analysts surveyed by Reuters had expected the company to make a profit. Their average estimate was 3.69 billion reais. The results have fanned concerns that the company, hampered by government intervention and soaring costs, will fail to meet its goal of becoming one of the three biggest crude producers by the end of the decade. The biggest impact on results was from the currency, Foster said. Brazil's real was an average 18 percent weaker in the second quarter than it was a year earlier. Lower returns from crude sales also hurt as production fell. Brent crude oil, a benchmark for world prices, was 7 percent lower in the period. Output fell 1.1 percent. Output fell even as the company ramped up its $237 billion 2012-2016 investment plan, the world's largest corporate investment program, which estimates an average spending of about $130 million a day for five years. Petrobras preferred shares, the company's most-traded class of stock, fell 1.2 percent to 19.70 reais at 2:35 p.m. (1735 GMT) in Sao Paulo. They opened on Monday more than 5 percent down but have since recovered slightly. Tweet this Link this Share this Digg this Email Reprints Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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